Amortisation

Amortisation is a repayment strategy where principal and interest portions of a debt are systematically paid off over predetermined intervals. Early on, more of each payment covers interest, while principal payoff accelerates in later phases. Such fixed-schedule paydowns are common in mortgages, car loans, and other installment obligations.

Key Points:

• Predictable Payments: Helps borrowers plan monthly budgets.
• Structured Timeline: Ensures the debt ends after a fixed term if payments remain consistent.
• Transparency: Amortisation tables show exactly how each payment distributes between principal and interest.

This balanced repayment method fosters clarity, reducing total interest costs if borrowers maintain or exceed the required payment schedule, eventually eliminating the loan entirely.